A lawsuit is now proceeding against the city of Shreveport for an alleged breach of contract while discovering information showing the city underbilling its water customers. (Source: Nick Lawton/KSLA News 12)

The contract in question, according to the lawsuit, was signed between Pernici and the city in 2015 after he discovered Shreveport was underbilling its water customers by more than $1 million a year after the city went to the a four-tier billing system.

Pernici brought the information to Wainwright; and they both brought the discrepancy to the city's attention.

"I guess I was naive. I thought we would be heroes," Wainwright said Monday.

"We were showing the city how to make $25 million over the next 25 years without having to pass a tax, without having to change a law, without having to fire an employee."

In exchange for bringing the discrepancy to the city's attention, Pernici and Wainwright asked for compensation amounting to 25 percent of the savings the city would accrue the first four years.

"The compensation we asked for equaled about 4 percent the money that the city would be realizing," Wainwright explained.

Pernici and Wainwright contracted the water consulting group Manchac, which drew up a contingency fee contract "whereby the city of Shreveport would obligate itself to pay a percentage of any enhanced or additional revenues the city realized through the implementation or adoption of any information and/or recommendations provided through Manchac Consulting Group Inc. to the City of Shreveport as a result of Wainwright's and Pernici's research."

Manchac also drew up an accord with the city that included a non-disclosure agreement, meaning details of the underbilling could not be revealed to anyone else.

Pernici and Wainwright claim the city violated the non-disclosure agreement by then taking the underbilling information to its own billing specialist and a third party, Systems and Software, which fixed the billing problem in August.

Then, according to the pair's defamation lawsuit, Tyler released a public statement in October alleging that Pernici and Wainwright threatened to release the discrepancy to the public if they weren't paid for it.

The lawsuit alleges that Tyler's statement, in part, read:

"The outside parties involved demanded, initially $250,000 for the information and a contract for future work. The last demand which threatened to expose this to the public rose to $1.8 million. I have been steadfast in my convictions to not allow the City to be extorted or blackmailed on the backs of the citizens."

The lawsuit alleges that Crawford made similar statements in an interview with KEEL Radio in October:

"... We get a letter from an individual who doesn't live in our state and says: 'Hey, no, I'm the person who discovered the error in the water bill and I want my money. And if I don't get my money, I'm going to make this public.' So - kind of like a shakedown thing; kind of a - threat....the mayor took it as a threat at that point ... ."

Wainwright said: "I practiced law in this town for 40 years, and I'm not going to sit back and let someone label me as being guilty of criminal acts."

The defamation lawsuit asks for Pernici and Wainwright to be awarded reasonable damages, to be determined at a trial, along with legal interest and court costs.

Their petition also asks that the court order those responsible to formally, effectively and publicly retract all defamatory statements that have been published thus far.

Another hearing about the alleged breach of contract was held Monday morning before Caddo District Court Judge Craig Marcotte.

Afterward, Marcotte ordered the city to provide a witness to explain exactly how it implemented the fix to its billing system to correct the mistake Pernici and Wainwright brought forward.

Wainwright said he filed a public records request with the city for that information in August. "The implementation of corrections to the water tier rates."

The city responded with 20,000 documents containing largely unrelated materials, he said. Only 50 of the documents contained information they were seeking.

"Almost comical," Wainright observed. "Menus from luncheons. We got CVS coupons, documents that had nothing to do with what we were looking for. But they made our search for the relevant documents all the much harder."

He said he hopes the next step in this lawsuit will bring to light the water billing fix that he thinks should have been made available to them last year.

"I had to drive 14 hours to get here and spend the night here in time to enforce a right that every citizen has to see documents that are public records," Wainright said.

A date has not been set yet for the next hearing in this case.

KSLA News 12 reached out to the city for comment. City attorney William Bradford said city officials do not comment on pending litigation.